The courts did not allow the trustee to take out additional insurance at the debtor’s expense

Vasily Sedov, who was appointed bankruptcy trustee of the company “Integral” in the fall of 2017, made deals on additional insurance for his liability. He spent 942 thousand rubles on this.

Since the purpose of such transactions was to conduct the bankruptcy of the company (case No. А07-537/2016), Sedov decided that these expenses should be paid at the expense of the bankruptcy estate of “Integral”. However, the arbitration courts, where the trustee applied with the applications, decided otherwise and refused.

Sedov, who had additionally insured his liability, relied on Article 24.1, Paragraph 2 of the Law on Insolvency. The bankruptcy trustee took into account the book value of assets of the company “Integral”, the bankruptcy of which implied the use of rules provided for organizations-developers (paragraph 7 of the Act). And since additional insurance was a necessary condition for further professional activity, Sedov insisted on the necessity of reimbursement at the expense of the first-priority payments from the register.

The courts of three instances unanimously rejected the manager’s intentions, reasoning that these costs are personal obligations of the manager and are associated with the costs of the profession. Therefore, one cannot pay for one’s own professional risks at the expense of the debtor’s property.

The insolvency practitioner filed appeals to the court of appeal and the district court. However, the latter did not grant his request either. The court pointed out that the additional insurance costs were not related to the powers of the insolvency administrator per se, but to his approval of his appointment in a particular case. That is, in other words, by agreeing to serve as superintendent in a particular case, Sedov thereby agreed to take out the additional insurance at his own expense.

As a result, the district court affirmed the lower courts’ verdicts. The court stated that there was no basis in this case that would allow the costs of the additional liability insurance to be attributed to the bankruptcy estate

Source: https://rusbankrot.ru/bankruptcy-and-liquidation/sudy-ne-pozvolili-upravlyayushchemu-dopolnitelno-zastrakhovatsya-za-schet-dolzhnika/